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Securing financing for your investment property

Paul Grewal, president of Street Capital Financial Corporation, explains what you need to know before going to your lender.

Video transcript below:

Paul Grewal, President, Street Capital FinancialPaul Grewal: The most important thing for a novice investor when they are planning and developing a rental real estate portfolio is to ensure that they understand the risks associated with that type of investment. Obviously he won’t understand the market, what the market opportunities are.

Over and above that you want to make, you want to ensure you have full disclosure of information whether it’s leases, understanding mortgage payments, how much of property taxes, what will the hydro and electrical bills be per month and ensure that you’ve done some of your own legwork in terms of qualification, because that’s important.

If you can’t afford it, the lender you are going to send your application to will probably reject your application. So you want to have a, I’d say a plan or strategy on how you are going to approach real estate investing, how many properties are you planning on undertaking and what’s the affordability. Do you have sufficient funds in liquid assets to carry you over those months when you have vacancies in your rental unit.

From our perspective we are looking for as when real estate investors approaching us for mortgage financing and properties, we actually encourage them or suggest to them that they deal with a mortgage broker. Because the mortgage broker will understand not only our lending policies and documentation that we require. More importantly they will ensure that the product meets the clients needs.

Right they can do a risk assessment profile, provide them with advice and counsel on what to anticipate, what documentation they need from the vendor or from an appraiser or from their client or tenanted properties. So we believe the right approach is for a client to consult with their mortgage broker first when they are planning on making real estate investments for rental purposes.